If the major DRAM manufacturers fixed prices from 1998 to 2002, they're about to pay for it

A saga that has been cumulating for the last eight
years is about to take another major step. Seven of the major eight DRAM
manufacturers will face a major antitrust complaint filing tomorrow lead
by Attorney General Bill Lockyer. Lockyer's filing for the
State of California will be followed by additional suits in thirty-three more
states shortly after.

The complaint claims that between 1998 and 2002 seven manufactures colluded
to "fix DRAM chip prices, artificially restrain supply, allocate among
themselves the production of DRAM chips and markets for the chips, and rig bids
for DRAM chip contracts." When the complaints are filed tomorrow,
July 14, the following companies will be named:

Elpida Memory (Japan)

Hynix Semiconductor (South
Korea)

Infineon Technologies AG
(Germany)

Micron Technology (USA)

Mosel Vitelic (Taiwan)

Nanya Technology Corp.
(Taiwan)

NEC Electronics America
(USA)

Interestingly enough, the world's largest DRAM
manufacturer, Samsung, is not listed in the claim. Samsung had a DRAM
market share of roughly 30% at the time and has been found guilty of
price fixing during that same period. In March of 2004, the FTC dropped
an antitrust case against Rambus, to which Rambus turned around and sued
Infineon, Hynix and Micron for artificially decreasing the price of DRAM
to hurt the proliferation of RDRAM. Samsung, Rambus' major producer of RDRAM at
the time, was also absent from these accusations.

The alleged collusion hurt the bottom line of several PC manufacturers at the
time. The suit to be filed by Lockyer names several manufactures,
including Apple, Compaq, Dell, Gateway and IBM.

An excerpt from one of the claims reads "The manufacturers did not limit
this pricing coordination to isolated or occasional conversations. On the
contrary, during a roughly four-year period, there were frequent pricing
communications among the conspiring manufacturers, exchanges that intensified
in the days immediately preceding the dates on which they submitted bids to
supply DRAM to the (computer makers), their largest and most important
customers."

Most of the price fixing in oil occurs as a result of OPEC, which is a self admitted cartel that excercises monopoly power over the oil market. It wouldn't matter if we sued the members of OPEC, however, because a lot of them are governments of foreign nations, and thus not subject to our laws. Moreover, its in our best interest not to sue them, considering how much people whine in this country over $3 gas.....

OPEC is not an monopoly - there are some big exporters of oil that are not in OPEC. The sad thing is the world is so dependent on oil (crude and refined), that even a smaller exporter can cause shakeups in the market. A 5% reduction in overall production will have important effects on the price - one of the reasons being that the current use is close to the maximum production possible (there is little unused capacity in both production and refining)

I didn;t say they were a monopoly, I said they were are cartel that exercises monopoly power. In antitrust law, the law is concerned with not only true monopolies, but also markets in which one or a few participants exercise monopoly power.